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424B3 1 d424b3.htm FINAL PROSPECTUS

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Filed Pursuant to Rule 424(b)(3)Registration No. 333-150367

ACE LimitedACE Global Headquarters17 Woodbourne Avenue

Hamilton HM08 Bermuda

May 30, 2008

Dear Shareholders:

We are furnishing the accompanying proxy statement/prospectus to shareholders of ACE Limited, or ACE, inconnection with the solicitation of proxies by our management for use at our annual general meeting of shareholders. Themeeting will be held at 8:00 a.m., Atlantic time, on Thursday, July 10, 2008, at ACE Global Headquarters, 17 WoodbourneAvenue, Hamilton, Bermuda to vote on certain of the proposals. In order to allow us to comply with certain legalrequirements discussed in the accompanying proxy statement/prospectus, the meeting will be adjourned to 8:00 a.m., Atlantictime, Monday July 14, 2008, at which time we will vote on the remainder of the proposals.

In addition to the normal business to be conducted at our annual general meeting, including electing directors, approvingour 2004 Long-Term Incentive Plan as amended and ratifying the appointment of our independent auditors, we will be askingyou to approve the change of our jurisdiction of incorporation from the Cayman Islands to Zurich, Switzerland, a number ofchanges to our charter documents to facilitate this change, and a number of organizational matters required under Swiss law.We call this process a Continuation.

After considerable thought and study, extending over a year, we concluded that incorporation in a major financial centerof high repute known for its stability and financial sophistication is in the best interests of our shareholders. Simply put, wedetermined that our current place of domicile represents an underutilized asset with potential downside risks and littleattendant upside. We believe the Continuation will reduce reputational, political, regulatory, and financial risks to ourcompany.

Since our incorporation in the Cayman Islands more than 22 years ago, we have grown to become a major NYSE-listedcompany with substantial global operations. Half of our business is in the U.S., and we have significant presence throughoutthe world, including Europe, Asia and Latin America. We therefore believe the re-domestication to Switzerland achieves anumber of important benefits to us, with little impact on net expense and effective tax rate, and that it will substantiallyincrease our strategic and capital flexibility while posing no noticeable risks to our operating model or our long-term strategy.We have chosen to re-domesticate ACE to Switzerland because of its political, economic and regulatory stability; tradition ofrespecting the rule of law; sophisticated financial regulation; network of excellent relations with major developed and

developing countries around the world; reliable tax treaties; and centuries-old tradition of capitalism.

For our shareholders, much will remain unchanged following the Continuation. Our shares will continue to trade on theNew York Stock Exchange under the symbol ACE. We will remain subject to U.S. Securities and Exchange Commissionreporting requirements, the mandates of the Sarbanes-Oxley Act and the corporate governance rules of the New York StockExchange. We will continue to report our financial results in U.S. dollars and under U.S. generally accepted accountingprinciples. As of the effectiveness of the Continuation, we will continue our legal existence in Switzerland as if we hadoriginally been incorporated under Swiss law. Each outstanding share of ACE as a Cayman Islands company will thenrepresent one share of ACE as a Swiss company.

From the perspective of ACE as an enterprise, however, the Continuation provides a credible and stable platform for the

Final Prospectus http://www.sec.gov/Archives/edgar/data/896159/000119312

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future. As a strategy holding company in Switzerland, we will have our headquarters in Zurich and we will hold future annualgeneral meetings and at least half our board meetings there. We will be, in effect,


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a Swiss citizen, covered by a network of Swiss treaties and international relationships, including tax treaties providingcertainty and predictability. We will also incorporate Swiss operating insurance companies, which will be regulated by theSwiss Federal Office of Private Insurance.

Please take the time to read the many details that follow in our proxy statement/prospectus. Although there is legal andfinancial complexity associated with any move like this, and the Continuation does present new risks and uncertainties, weare confident that the Continuation enhances both our operating model and institutional credibility, while avoiding anymaterially negative financial effects.

For the reasons set forth in the proxy statement/prospectus, our board of directors unanimously believes that theproposed Continuation is in the best interests of our shareholders, and we therefore strongly urge you to vote FORtheContinuation and FORthe other proposals described in the accompanying proxy statement/prospectus.

Very truly yours,

Evan G. GreenbergChairman and Chief Executive Officer

YOUR VOTE IS IMPORTANT

In order to ensure your representation at the meeting, you are requested to complete, sign and date the enclosedproxy card as promptly as possible and return it in the enclosed envelope or vote via telephone or via Internet by

following the instructions on the proxy card.


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NOTICE OF ANNUAL GENERAL MEETING

May 30, 2008Hamilton, Bermuda

TO THE SHAREHOLDERS OF ACE LIMITED:

The Annual General Meeting of ACE Limited will be held at 8:00 a.m., Atlantic time on Thursday, July 10, 2008 andcontinued at 8:00 a.m., Atlantic time, Monday, July 14, 2008, in each case at ACE Global Headquarters, 17 WoodbourneAvenue, Hamilton, Bermuda, for the following purposes:

1. To elect new directors (and confirm existing directors);

2. To consider and vote upon a special resolution to amend (the De-Registration Amendment) the CompanysMemorandum of Association and Articles of Association (our Articles) to permit the de-registration of theCompany from the Cayman Islands as provided in Section 226 of the Cayman Islands Companies Law;

3. If the De-Registration Amendment is approved, to consider and vote upon a special resolution to amend (theFinancial Statement Amendment) our Articles to require the Company to prepare and provide to shareholders notless than annually an unconsolidated balance sheet of the Company valuing the Companys investment in itssubsidiaries on a mark-to-market basis;

4. If the De-Registration Amendment is approved, to consider and vote upon a special resolution which will have theeffect of increasing the par value of our Ordinary Shares from $0.041666667 to an amount in Swiss francs (theNew Par Value) equal to $11,000,000,000 divided by the number of our Ordinary Shares outstanding as of theclose of business on July 10, 2008 and converted into Swiss francs using the then most recently available noonbuying rate in New York certified by the Federal Reserve Bank of New York for customs purposes, and which will

involve the following actions (the Par Value Change): amending our Articles to permit us to convert all or any ofour issued Ordinary Shares into stock and re-converting that stock into Ordinary Shares of any denomination;converting all of our issued Ordinary Shares into stock; re-converting the stock into Ordinary Shares with a parvalue equal to the New Par Value (which will result in a decrease in the number of our issued Ordinary Shares);amending our Articles to increase the number of authorized Ordinary Shares back to 500,000,000 shares; andpayment of a stock dividend the effect of which will be to increase the number of issued Ordinary Shares back tothe number of issued Ordinary Shares immediately prior to the conversion and re-conversion.

5. If the De-Registration Amendment is approved, to consider and vote upon a special resolution to approve theCompanys de-registration from the Cayman Islands and the Companys continuation in Zurich, Switzerland (theContinuation);

6. If the Continuation is approved and as required by Swiss law, to approve the name of the Company;

7. If the Continuation is approved and as required by Swiss law, to change the purpose of the Company;

8. If the Continuation is approved and as required by Swiss law, to approve the rearrangement of the Companysexisting share capital;

9. If the Continuation is approved and as required by Swiss law, to approve the Companys Articles of Association;

10. If the Continuation is approved and as required by Swiss law, to confirm Swiss law as the authoritative legislationgoverning the Company;


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11. If the Continuation is approved and as required by Swiss law, to confirm the principal place of business of the

Company as Zurich, Switzerland;

12. If the Continuation is approved, to appoint BDO Visura as special auditor until our next annual general meeting;

13.

Approval of our 2004 Long-Term Incentive Plan as amended through the fourth amendment;14. To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm

and, if the Continuation is approved and as required by Swiss law, to elect PricewaterhouseCoopers AG as ourstatutory auditors for a term of one year until our next annual general meeting;

15. If the Continuation is approved, to approve the payment of a dividend (the Dividend) through a reduction of thepar value of our shares in an amount equal to the Swiss franc equivalent of $0.87, converted into Swiss francs usingthe most recently available noon buying rate in New York certified by the Federal Reserve Bank of New York forcustoms purposes as of the close of business on July 9, 2008, and to pay such amount in three equal quarterlyinstallments at such times during the period through our next annual general meeting as shall be determined by theBoard of Directors; and

16. To transact such other business, if any, as lawfully may be brought before the meeting.

Proposals 1 (confirmation of existing directors only), 6 through 12, 14 (statutory auditors only) and 15 are furtherconditional upon all of these proposals being approved by the Annual General Meeting and, except for proposals 10 and 11,the registration of the related shareholder resolutions with the Commercial Register of the Canton of Zurich, Switzerland.

Proposals 2, 3, 4 and 5, which we refer to as the Cayman Proposals, will be voted upon at the Annual General Meetingon Thursday, July 10, 2008 and, if each of these proposals is approved, the remainder of the proposals will be voted upon atthe continuation of the meeting on Monday, July 14, 2008. In the event any of the Cayman Proposals is not approved,proposals 1 (election of directors only), 13 and 14 (ratification of independent auditors only) will be voted upon at the AnnualGeneral Meeting on Thursday, July 10, 2008.

Only shareholders of record, as shown by our transfer books, at the close of business on May 27, 2008, are entitled tonotice of, and to vote at, the Annual General Meeting.

PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE RETURN ENVELOPEFURNISHED FOR THAT PURPOSE, AS PROMPTLY AS POSSIBLE, WHETHER OR NOT YOU PLAN TOATTEND THE MEETING. IF YOU LATER DESIRE TO REVOKE YOUR PROXY FOR ANY REASON, YOUMAY DO SO IN THE MANNER DESCRIBED IN THE ATTACHED PROXY STATEMENT/PROSPECTUS. YOUMAY ALSO VOTE OVER THE INTERNET OR VIA TELEPHONE BY FOLLOWING THE VOTINGINSTRUCTIONS PROVIDED ON THE ACCOMPANYING PROXY CARD. FOR FURTHER INFORMATIONCONCERNING THE INDIVIDUALS NOMINATED AS DIRECTORS, THE PROPOSALS BEING VOTED UPON,USE OF THE PROXY AND OTHER RELATED MATTERS, YOU ARE URGED TO READ THE PROXYSTATEMENT/PROSPECTUS ON THE FOLLOWING PAGES.

By Order of the Board of Directors,

Evan G. GreenbergChairman and Chief Executive Officer

See Risk Factors beginning on page 17 for a discussion of specified matters that should be considered.

Neither the Securities and Exchange Commission nor any state securities commission, or similar authority in theCayman Islands or Switzerland, has approved or passed upon the merits of these securities or determined if the proxystatement/prospectus is truthful or complete. Any representation to the contrary is a criminal offense.


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TABLE OF CONTENTS

FORWARD-LOOKING STATEMENTS 1

SUMMARY 4

Information About The Annual General Meeting And Voting 4Information About the Continuation 13

RISK FACTORS 17

THE ANNUAL GENERAL MEETING 21Date, Time and Place 21The Proposals 21Record Date 22Quorum and Required Vote 22Voting by Directors and Executive Officers 24Appointment of Proxies 24Revocation of Proxies 25

Voting in Person at the Annual General Meeting 25Costs of Solicitation 25

PROPOSAL NO. 1: ELECTION OF DIRECTORS FOR TERMS ENDING IN 2011 AND CONFIRMATION OFDIRECTORS WHOSE TERMS EXPIRE IN 2009 AND 2010 26

General 26Nominees for Election to Terms Expiring in 2011 27Directors Whose Terms Expire in 2009 27Directors Whose Terms Expire in 2010 28

PROPOSAL NO. 2: AMENDMENT OF MEMORANDUM OF ASSOCIATION AND ARTICLES OF ASSOCIATIONTO PERMIT DE-REGISTRATION 30

PROPOSAL NO. 3: AMENDMENT OF ARTICLES OF ASSOCIATION TO REQUIRE PREPARATION OF

UNCONSOLIDATED BALANCE SHEET 31PROPOSAL NO. 4: AMENDMENT OF MEMORANDUM OF ASSOCIATION TO FACILITATE CHANGE OF PAR

VALUE 33

PROPOSAL NO. 5: APPROVAL OF THE CONTINUATION 37General 37Principal Reasons for the Continuation 37Effects of the Continuation 38Pro Forma Capitalization 39Accounting Treatment of Continuation 39Material Tax Considerations 40Description of Share Capital 54BorrowingIssuance of Debt Securities 63Comparison of Shareholder Rights 65Shareholder Approval 82Regulatory and Other Approvals 82No Rights for Dissenting Shareholders 83Interest of Management in the Continuation 83

PROPOSAL NO. 6: APPROVAL OF THE NAME OF THE COMPANY 84

PROPOSAL NO. 7: CHANGE OF THE PURPOSE OF THE COMPANY 85

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PROPOSAL NO. 8: APPROVAL OF THE REARRANGEMENT OF THE COMPANYS EXISTING SHARECAPITAL 86

PROPOSAL NO. 9: APPROVAL OF THE COMPANYS ARTICLES OF ASSOCIATION 88

PROPOSAL NO. 10: CONFIRMATION OF SWISS LAW AS THE AUTHORITATIVE LEGISLATIONGOVERNING THE COMPANY 89

PROPOSAL NO. 11: APPROVAL OF THE PRINCIPAL PLACE OF BUSINESS OF THE COMPANY AS ZURICH,SWITZERLAND 90

PROPOSAL NO. 12: APPOINTMENT OF BDO VISURA AS SPECIAL AUDITOR 91

PROPOSAL NO. 13: APPROVAL OF ACE LIMITED 2004 LONG-TERM INCENTIVE PLAN AS AMENDEDTHROUGH THE FOURTH AMENDMENT 92

Purpose 92General 93Eligibility 95Options 95

Stock Appreciation Rights 95Full Value Awards 95Cash Incentive Awards 96$1 Million Limit 96Change in Control 97Amendment and Termination 97United States Income Tax Considerations 97Security Ownership of Certain Beneficial Owners and Management 99

PROPOSAL NO. 14: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM AND ELECTION OF STATUTORY AUDITOR 101

Independent Auditor Fee Information 101Pre-Approval Policy of Audit and Non-Audit Services

102

PROPOSAL NO. 15: APPROVAL OF DIVIDEND IN THE FORM OF A PAR VALUE REDUCTION 103

CORPORATE GOVERNANCE 106Overview 106The Board of Directors 108Director Independence and Other Information 108The Committees of the Board 108How Are Directors Nominated? 110What Is Our Related Party Transactions Approval Policy and What Procedures Do We Use to Implement It? 111What Related Person Transactions Do We Have? 112Did Our Officers and Directors Comply with Section 16(a) Beneficial Ownership Reporting in 2007? 114

INFORMATION ABOUT OUR ORDINARY SHARE OWNERSHIP 115How Many Ordinary Shares Are Owned by Directors and Executive Officers? 115Which Shareholders Own More than 5 Percent of Our Ordinary Shares? 116

EXECUTIVE COMPENSATION 117Compensation Discussion and Analysis 117Compensation Committee Report 130Summary Compensation Table 131Employment Arrangements 132Employee Stock Purchase Plan 133

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Indemnification Agreements 133Grants of Plan-Based Awards 134Outstanding Equity Awards at Fiscal Year End 135Option Exercises and Stock Vested 137

Nonqualified Deferred Compensation 137Potential Payments Upon Termination or Change in Control 138Director Compensation 144

AUDIT COMMITTEE REPORT 147

SHAREHOLDER PROPOSALS FOR 2009 ANNUAL MEETING 149How Do I Submit a Proposal for Inclusion in Next Years Proxy Material? 149How Do I Submit a Proposal or Make a Nomination at an Annual General Meeting? 149

OTHER MATTERS 149

LEGAL AND TAX MATTERS 149

EXPERTS 150

WHERE YOU CAN FIND MORE INFORMATION 150

ENFORCEMENT OF CIVIL LIABILITIES UNDER U.S. SECURITIES LAWS 151

EXHIBIT APROPOSED FORM OF ARTICLES OF ASSOCIATION OF ACE LIMITED. A-1

EXHIBIT BPROPOSED FORM OF ORGANIZATIONAL REGULATIONS OF ACE LIMITED. B-1

EXHIBIT CCATEGORICAL STANDARDS FOR DIRECTOR INDEPENDENCE C-1

EXHIBIT DACE LIMITED 2004 LONG-TERM INCENTIVE PLAN, (AS AMENDED THROUGH THEFOURTH AMENDMENT) D-1

EXHIBIT EOPTIONAL INDEPENDENT PROXY FOR REGISTERED HOLDERS E-1

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ACE LIMITEDACE Global Headquarters

17 Woodbourne AvenueHamilton HM 08 Bermuda

May 30, 2008

PROXY STATEMENT/PROSPECTUS

We are sending you this proxy statement/prospectus in connection with our 2008 Annual General Meeting which will beheld on Thursday, July 10, 2008 at 8:00 a.m., Atlantic time, and continued on Monday, July 14, 2008 at 8:00 a.m., Atlantictime, in each case at ACE Global Headquarters, 17 Woodbourne Avenue, Hamilton, Bermuda. In addition to normal businessto be conducted at our annual general meeting, including electing directors, approving our 2004 Long-Term Incentive Plan asamended through the fourth amendment and ratifying the appointment of our independent auditors, we will be asking you toapprove the change of our jurisdiction of incorporation from the Cayman Islands to Zurich, Switzerland, a number of changesto our charter documents to facilitate this change, and a number of organizational matters required under Swiss law.

May 27, 2008 is the record date for the Annual General Meeting. If you owned our Ordinary Shares at the close ofbusiness on May 27, 2008, you are entitled to vote at the Annual General Meeting. On that date, we had 332,982,169Ordinary Shares outstanding and entitled to vote at the Annual General Meeting. Our Ordinary Shares are our only class ofvoting stock. We will begin mailing this proxy statement/prospectus on or about June 5, 2008 to all shareholders entitled tovote.

FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements. Anywritten or oral statements made by us or on our behalf may include forward-looking statements that reflect our current viewswith respect to future events and financial performance. These forward-looking statements are subject to certain uncertainties

and other factors that could cause actual results to differ materially from such statements. These uncertainties and otherfactors (which are described in more detail elsewhere in this proxy statement/prospectus and in our SEC filings that we haveincorporated by reference) include but are not limited to:

losses arising out of natural or man-made catastrophes such as hurricanes, typhoons, earthquakes, floods orterrorism which could be affected by:

the number of insureds and ceding companies affected,

the amount and timing of losses actually incurred and reported by insureds,

the impact of these losses on our reinsurers, and the amount and timing of reinsurance recoverables actuallyreceived,

the cost of building materials and labor to reconstruct properties following a catastrophic event, and

complex coverage and regulatory issues such as whether losses occurred from storm surge or flooding andrelated lawsuits;

actions that rating agencies may take from time to time, such as changes in our claims-paying ability, financialstrength or credit ratings or placing these ratings on credit watch negative or the equivalent;

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global political conditions, the occurrence of any terrorist attacks, including any nuclear, radiological, biological orchemical events, or the outbreak and effects of war, and possible business disruption or economic contraction thatmay result from such events;

the ability to collect reinsurance recoverables, credit developments of reinsurers, and any delays with respect

thereto and changes in the cost, quality or availability of reinsurance;

the occurrence of catastrophic events or other insured or reinsured events with a frequency or severity exceedingour estimates;

actual loss experience from insured or reinsured events and the timing of claim payments;

the uncertainties of the loss-reserving and claims-settlement processes, including the difficulties associated withassessing environmental damage and asbestos-related latent injuries, the impact of aggregate-policy-coveragelimits, and the impact of bankruptcy protection sought by various asbestos producers and other related businessesand the timing of loss payments;

judicial decisions and rulings, new theories of liability, legal tactics and settlement terms;

the effects of public company bankruptcies and/or accounting restatements, as well as disclosures by and

investigations of public companies relating to possible accounting irregularities, and other corporate governanceissues, including the effects of such events on:

the capital markets;

the markets for directors and officers and errors and omissions insurance; and

claims and litigation arising out of such disclosures or practices by other companies;

uncertainties relating to governmental, legislative and regulatory policies, developments, actions, investigations andtreaties, which, among other things, could subject us to insurance regulation or taxation in additional jurisdictionsor affect our current operations;

the actual amount of new and renewal business, market acceptance of our products, and risks associated with theintroduction of new products and services and entering new markets, including regulatory constraints on exitstrategies;

the competitive environment in which we operate, including trends in pricing or in policy terms and conditions,which may differ from our projections and changes in market conditions that could render our business strategiesineffective or obsolete;

Combined Insurance Company of America and its subsidiaries, that we acquired in April 2008, and which we referto collectively as Combined, or any other company acquired by us, performing differently than expected by us orthe failure to realize anticipated expense-related efficiencies from our April 2008 acquisition of Combined or anyother such acquisition;

developments in global financial markets, including changes in interest rates, stock markets and other financialmarkets, and foreign currency exchange rate fluctuations, which could affect our statement of operations,

investment portfolio and financing plans; risks associated with our continuation to Switzerland, including anticipated reduced flexibility with respect to

certain aspects of capital management, the potential for additional regulatory burdens, and the potential that we willnot remain on stock indices of which we are currently a part;

the potential impact from government-mandated insurance coverage for acts of terrorism;

the availability of borrowings and letters of credit under our credit facilities;

changes in the distribution or placement of risks due to increased consolidation of insurance and reinsurancebrokers;


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material differences between actual and expected assessments for guaranty funds and mandatory pooling

arrangements;

the effects of investigations into market practices in the property and casualty industry;

changing rates of inflation and other economic conditions; the amount of dividends received from subsidiaries;

loss of the services of any of our executive officers without suitable replacements being recruited in a reasonabletime frame;

the ability of our technology resources to perform as anticipated; and

managements response to these factors and actual events (including, but not limited to, those described above).

The words believe, anticipate, estimate, project, should, plan, expect, intend, hope, will likely

result or will continue, and variations thereof and similar expressions, identify forward-looking statements. You are

cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. We undertake

no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future

events or otherwise.

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SUMMARY

This summary highlights selected information appearing elsewhere in this proxy statement/prospectus and does not

contain all the information that you should consider in making your investment decision. You should read this summary

together with the more detailed information, including our financial statements and the related notes, elsewhere in thisproxy statement/prospectus and the documents incorporated by reference herein. You should read this proxy

statement/prospectus in its entirety. References in this proxy statement/prospectus to $ and USD are to United States

dollars and references to CHF are to Swiss francs.

Information About The Annual General Meeting And Voting

Why Did You Send Me This Proxy Statement/Prospectus?

We sent you this proxy statement/prospectus and the enclosed proxy card because the Board of Directors of ACELimited (which we refer to as we, us, our, ACE, or the Company) is soliciting your proxy to vote at the 2008 AnnualGeneral Meeting, which will be held on Thursday, July 10, 2008, at 8:00 a.m., Atlantic time, and continued at 8:00 a.m.,Atlantic time, Monday, July 14, 2008, in each case at ACE Global Headquarters, 17 Woodbourne Avenue, Hamilton,

Bermuda, and at any adjournments thereof. A copy of our Annual Report to Shareholders for the fiscal year endedDecember 31, 2007 accompanies this proxy statement/prospectus.

This proxy statement/prospectus summarizes the information you need to vote at the Annual General Meeting. Youdo not need to attend the Annual General Meeting to vote your shares. You may simply complete, sign and return theenclosed proxy card or vote by telephone or over the Internet.

What Proposals Will Be Voted on at the Annual General Meeting?

In addition to the normal business to be conducted at our annual general meeting, including electing directors (this isproposal no. 1), approving our 2004 Long-Term Incentive Plan as amended through the fourth amendment (this isproposal no. 13) and ratifying the appointment of our independent auditors (this is part of proposal no. 14), we will beasking you to approve the Companys de-registration from the Cayman Islands and the Companys continuation inZurich, Switzerland, which we refer to as the Continuation, a number of changes to our charter documents to facilitatethe Continuation and a number of organizational matters required under Swiss law. Under Swiss law, a number of thesematters must be voted on separately and so we will present 15 proposals to be voted on at the meeting. We havesummarized these proposals below.

First we need to get our company in a position so that it can redomesticate. We will accomplish that by amending ourmemorandum of association, which we refer to as the Memorandum, and our articles of association, which we refer toas our Articles, to permit us to de-register in the Cayman Islands (this is proposal no. 2) and to increase the par value ofour shares (this is proposal no. 4) which, as described in detail below, will facilitate our payment of dividends through areduction of the par value of our shares without withholding tax for an extended period after the Continuation. TheFinancial Statement Amendment (as defined below) (this is proposal no. 3) facilitates the increase in the par value of ourshares. Once we are in a position to redomesticate, we will ask you to approve the Continuation (this is proposal no. 5).

Second, we need to set up our company under Swiss law. Swiss law requires that a number of matters be specificallyapproved by shareholders, including our name (this is proposal no. 6), our corporate purpose (this is proposal no. 7), ournew share capital (this is proposal no. 8), our new Swiss articles of association (this is proposal no. 9), the fact that wewill be governed by Swiss law (this is proposal no. 10) and the fact that our principal place of business will be in Zurich,Switzerland (this is proposal no. 11). We will also ask you to approve the appointment of a special auditor (this isproposal no. 12), which is needed in connection with certain increases and decreases in share capital. We will also ask youto approve PricewaterhouseCoopers AG, the Swiss affiliate of our current auditors, as our statutory auditor (this is part ofproposal no. 14).

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We will also ask you to approve an annual dividend through a reduction of the par value of our shares (this isproposal no. 15). Under Swiss law, shareholders are required to approve dividends, including dividends through areduction of the par value of our shares. So that we can continue paying dividends on approximately the same schedule asbefore the Continuation, we will ask you to approve an annual dividend that we will pay quarterly. The dividend willformally be through a reduction of the par value of our shares, which we increased before the Continuation for thispurpose, because payments of amounts in reduction of share capital are not subject to the normal Swiss withholding taxon dividends.

The 15 proposals scheduled to be voted on at the Annual General Meeting, which are summarized in theimmediately preceding paragraphs, are as follows:

1. To elect new directors (and confirm existing directors);

2. To consider and vote upon a special resolution to amend, which we refer to as the De-Registration Amendment,our Memorandum and Articles to permit the de-registration of the Company from the Cayman Islands as provided inSection 226 of the Cayman Islands Companies Law;

3. If the De-Registration Amendment is approved, to consider and vote upon a special resolution to amend, which we

refer to as the Financial Statement Amendment, our Articles to require the Company to prepare and provide toshareholders not less than annually an unconsolidated balance sheet of the Company valuing the Companysinvestment in its subsidiaries on a mark-to-market basis;

4. If the De-Registration Amendment is approved, to consider and vote upon a special resolution which will have theeffect of increasing the par value of our Ordinary Shares from $0.041666667 to an amount in Swiss francs, which werefer to as the New Par Value, equal to $11,000,000,000 divided by the number of our Ordinary Shares outstandingas of the close of business on July 10, 2008 and converted into Swiss francs using the then most recently availablenoon buying rate in New York certified by the Federal Reserve Bank of New York for customs purposes, and whichwill involve the following actions, which we refer to collectively as the Par Value Change: amending our Articlesto permit us to convert all or any of our issued Ordinary Shares into stock and re-converting that stock intoOrdinary Shares of any denomination; converting all of our issued Ordinary Shares into stock; re-converting thestock into Ordinary Shares with a par value equal to the New Par Value (which will result in a decrease in thenumber of our issued Ordinary Shares); amending our Articles to increase the number of authorized Ordinary Sharesback to 500,000,000 shares; and payment of a stock dividend the effect of which will be to increase the number ofissued Ordinary Shares back to the number of issued Ordinary Shares immediately prior to the conversion andre-conversion;

5. If the De-Registration Amendment is approved, to consider and vote upon a special resolution to approve theContinuation;

6. If the Continuation is approved and as required by Swiss law, to approve the name of the Company;

7. If the Continuation is approved and as required by Swiss law, to change the purpose of the Company;

8. If the Continuation is approved and as required by Swiss law, to approve the rearrangement of the Companysexisting share capital;

9. If the Continuation is approved and as required by Swiss law, to approve the Companys Articles of Association;

10. If the Continuation is approved and as required by Swiss law, to confirm Swiss law as the authoritative legislationgoverning the Company;

11. If the Continuation is approved and as required by Swiss law, to confirm the principal place of business of theCompany as Zurich, Switzerland;

12. If the Continuation is approved, to appoint BDO Visura as special auditor until our next annual general meeting;

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13. Approval of our 2004 Long-Term Incentive Plan as amended through the fourth amendment (the LTIP);

14. To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm and,if the Continuation is approved and as required by Swiss law, to elect PricewaterhouseCoopers AG as our statutory

auditor for a one year term until our next annual general meeting; and15. If the Continuation is approved, to approve the payment of a dividend (the Dividend) through a reduction of the

par value of our shares in an amount equal to the Swiss franc equivalent (the Dividend Amount) of $0.87,converted into Swiss francs using the most recently available noon buying rate in New York certified by the FederalReserve Bank of New York for customs purposes as of the close of business on July 9, 2008, and to pay such amountin three equal quarterly installments at such times during the period through our next annual general meeting as shallbe determined by the Board of Directors.

Proposal 1 (confirmation of existing directors only), 6 through 12, 14 (statutory auditors only) and 15 are furtherconditional upon all of these proposals being approved by the Annual General Meeting and, except for proposals 10 and11, the registration of the related shareholder resolutions with the Commercial Register of the Canton of Zurich,Switzerland.

We refer to the proposals conditioned on approval of the Continuation, i.e., proposals 6 through 12 above, and theproposal to elect PricewaterhouseCoopers AG as our statutory auditors (which is part of proposal 14) as the SwissOrganizational Proposals. We refer to the Cayman Proposals and the Swiss Organizational Proposals collectively as theContinuation Proposals. The Continuation is conditioned upon approval of all of the Continuation Proposals and theDividend and the registration of the related shareholder resolutions with the Commercial Register of the Canton ofZurich, Switzerland. If approved, the De-Registration Amendment, the Financial Statement Amendment and the ParValue Change will become effective at 8:00 p.m., Eastern Daylight Time, on July 10, 2008. The Swiss OrganizationalProposals will be subject to, and will become effective only upon, the registration of the related shareholder resolutionswith the Commercial Register of the Canton of Zurich, Switzerland. Our Board recommends that you vote your sharesFOR each of these proposals.

Under Swiss law, the approval of each of the Swiss Organizational Proposals, other than proposals 7, 8 and 9,

requires the affirmative vote of a majority of the votes present at the Annual General Meeting. The approval of proposals7, 8 and 9, requires the affirmative vote of at least two-thirds of the votes present and of the majority of the nominal valuerepresented at the Annual General Meeting (collectively the Swiss Majority Requirements).

If any of the Continuation Proposals is not approved by our shareholders, the Company will still present theproposals regarding election and confirmation of directors, approval of the LTIP as amended through the fourthamendment and ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered publicaccounting firm for the fiscal year ending December 31, 2008. Our Board recommends that you vote your sharesFOR each of these proposals.

Why Is the Board of Directors Recommending Approval of the Continuation?

To achieve our long-term growth objectives, we regularly assess our organization and financial structure. Since our

incorporation in the Cayman Islands more than 22 years ago, we have grown to become a major NYSE-listed companywith substantial global operations. Half of our business is in the U.S., and we have significant presence throughout theworld, including Europe, Asia and Latin America.

Our Board of Directors has concluded that incorporation in a major financial center of high repute known for itsstability and financial sophistication is in the best interests of our shareholders. The decision to recommend theContinuation was based in part on the following determinations:

our current place of domicile represents an underutilized asset with potential downside risks and little attendantupside;


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re-domestication can achieve a number of important benefits to us, with little impact on net expense and

effective tax rate;

the Continuation can help reduce reputational, political, regulatory, and financial risks to our company; and

the Continuation can increase our strategic and capital flexibility while posing no noticeable risks to ouroperating model or our long-term strategy.

We have chosen to re-domesticate our holding company to Zurich, Switzerland, among other reasons, because it:

is a leading financial center with great political, economic and regulatory stability;

has a tradition of respecting the rule of law;

has a sophisticated financial and regulatory environment;

has a network of excellent relations with major developed and developing countries around the world;

is party to reliable tax treaties; and

has a centuries-old tradition of capitalism.

See Proposal No. 4: Approval of the Continuation Principal Reasons for the Continuation.

Are proxy materials available on the Internet?

Important Notice Regarding the Availability of Proxy Materials for theShareholder Meeting To Be Held on Thursday, July 10, 2008 and continued on Monday, July 14, 2008

Our proxy statement/prospectus for the 2008 Annual General Meeting, form of proxy card and 2007 annualreport are available at http://phx.corporate-ir.net/phoenix.zhtml?c=100907&p=proxy.

Directions to attend the 2008 Annual General Meeting can be obtained by contacting Investor Relations at (441)299-9283.

Who Is Entitled to Vote?

May 27, 2008 is the record date for the Annual General Meeting. If you owned our Ordinary Shares at the close ofbusiness on May 27, 2008, you are entitled to vote at the Annual General Meeting. On that date, we had 332,982,169Ordinary Shares outstanding and entitled to vote at the Annual General Meeting. Our Ordinary Shares are our only classof voting stock. We will begin mailing this proxy statement/prospectus on or about June 5, 2008 to all shareholdersentitled to vote.

How Many Votes Do I Have?

You have one vote for each of our Ordinary Shares that you owned at the close of business on May 27, 2008, unlessyou owned Controlled Shares that constituted 10 percent or more of the issued Ordinary Shares, in which case your

voting rights with respect to those Controlled Shares will be limited, in the aggregate, to a voting power of approximately10 percent pursuant to a formula specified in our Articles. Our Articles define Controlled Shares generally to include allshares of the Company directly, indirectly or constructively owned or beneficially owned by any person or group ofpersons.

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What Is the Difference Between Holding Shares as a Shareholder of Record and as a Beneficial Owner?

Most of our shareholders hold their shares through a stockbroker, bank or other nominee rather than directly in theirown name. As summarized below, there are some differences between shares held of record and those owned beneficially.

Shareholder of Record

If your shares are registered directly in your name with our transfer agent, BNY Mellon Shareowner Services, youare considered, with respect to those shares, the shareholder of record and these proxy materials are being sent to youdirectly by us. As the shareholder of record, you have the right to grant your voting proxy directly to the Companyofficers named in the proxy card or to vote in person at the Annual General Meeting. We have enclosed a proxy card foryou to use. You may also vote on the Internet or by telephone as described below under the heading May I Vote byTelephone or Via the Internet?

Beneficial Owner

If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the beneficialowner of shares held in street name, and these proxy materials are being forwarded to you by your broker, bank or othernominee who is considered, with respect to those shares, the shareholder of record. As the beneficial owner, you have theright to direct your broker, bank or other nominee on how to vote your shares and are also invited to attend the AnnualGeneral Meeting. However, since you are not the shareholder of record, you may only vote these shares in person at theAnnual General Meeting if you follow the instructions described below under the heading How Do I Vote in Person atthe Annual General Meeting. Your broker, bank or other nominee has enclosed a voting instruction card for you to use indirecting your broker, bank or other nominee as to how to vote your shares. You may also vote on the Internet or bytelephone as described below under the heading May I Vote by Telephone or Via the Internet.

How Do I Vote by Proxy?

If you properly fill in your proxy card and send it to us in time to vote, your proxy, meaning one of the individualsnamed on your proxy card, will vote your shares as you have directed. If you sign the proxy card but do not make specificchoices, your proxy will vote your shares as recommended by the Board:

FOR each of the Continuation Proposals.

FOR the Dividend.

FOR the election of directors for terms expiring in 2011 and confirmation of directors whose terms expire in2009 and 2010.

FOR approval of the LTIP as amended through the fourth amendment.

FOR the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm for2008.

If any other matter is presented, your proxy will vote in accordance with his best judgment. At the time we beganprinting this proxy statement/prospectus, we knew of no matters that needed to be acted on at the Annual General

Meeting other than those discussed in this proxy statement/prospectus.

How Do I Appoint an Independent Proxy?

If you are a shareholder of record as of the record date, you may authorize the independent representative, James M.Michener, Esq, Hamilton, Bermuda, with full rights of substitution, to vote your Ordinary Shares on your behalf insteadof using the enclosed proxy card. Mr. Micheners address is: 30 Woodbourne Avenue, 5th Floor, Hamilton HM 08,Bermuda. If you authorize the independent representative to vote your shares without

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giving instructions, your shares will be voted in accordance with the proposals of the Board of Directors with regard tothe items listed in the notice of meeting. If new proposals (other than those in the notice of meeting) are being put forthbefore the Annual General Meeting, the independent representative will abstain from voting regarding new proposals. Anoptional form of proxy that may be used to appoint the independent representative is attached to this proxystatement/prospectus as Exhibit E. Proxy forms authorizing the independent representative to vote Ordinary Shares onyour behalf must be sent directly to the independent representative, arriving no later than July 9, 2008.

May I Vote by Telephone or Via the Internet?

Yes. Instead of submitting your vote by mail on the enclosed proxy card, you may be able to give your votinginstruction via the Internet or by telephone. We encourage you to do so because your vote is then tabulated faster than ifyou mailed it. Please note that there are separate Internet and telephone arrangements depending on whether you are ashareholder of record (that is, if you hold your stock in your own name) or a beneficial owner that holds your shares instreet name (that is, if your stock is held in the name of your broker, bank or other nominee).

If you are a shareholder of record, you may give your voting instructions by telephone, or electronically through theInternet, by following the instructions provided on your proxy card.

If you are a beneficial owner and hold your shares in street name, you may need to contact your broker, bank or othernominee to determine whether you will be able to give your voting instructions by telephone or electronically.

The telephone and Internet voting procedures are designed to authenticate shareholders identities, to allowshareholders to give their voting instructions and to confirm that shareholders instructions have been recorded properly.If you give your voting instructions via the Internet, you may incur costs, such as usage charges from Internet accessproviders and telephone companies. You will be responsible for those costs.

Whether or not you plan to attend the Annual General Meeting, we urge you to vote. Returning the proxy card orgiving your voting instructions by telephone or over the Internet will not affect your right to attend the Annual GeneralMeeting and vote.

May I Revoke My Proxy?

Yes. If you change your mind after you vote, you may revoke your proxy by following any of the proceduresdescribed below. To revoke your proxy:

Send in another signed proxy with a later date or resubmit your vote by telephone or by the Internet,

Send a letter revoking your proxy to our Corporate Secretary at ACE Global Headquarters, 17 WoodbourneAvenue, Hamilton HM 08, Bermuda, or

Attend the Annual General Meeting and vote in person.

If you wish to revoke your proxy, you must do so in sufficient time to permit the necessary examination andtabulation of the subsequent proxy or revocation before the vote is taken.

How Do I Vote in Person at the Annual General Meeting?

You may vote shares held directly in your name as the shareholder of record in person at the Annual GeneralMeeting. If you choose to vote your shares in person at the Annual General Meeting, please bring the enclosed proxy cardor proof of identification. Even if you plan to attend the Annual General Meeting, we recommend that you vote yourshares in advance as described above so that your vote will be counted if you later decide not to attend the AnnualGeneral Meeting.

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Shares beneficially owned and held in street name may be voted in person by you only if you obtain a signed proxyfrom the shareholder of record giving you the right to vote the shares. If your shares are held in the name of your broker,bank or other nominee, you must bring to the Annual General Meeting an account statement or letter from the broker,bank or other nominee indicating that you are the owner of the shares and a signed proxy from the shareholder of recordgiving you the right to vote the shares. The account statement or letter must show that you were beneficial owner of theshares on May 27, 2008.

What Votes Need to Be Present to Hold the Annual General Meeting?

Under the Cayman Islands Company Law, which we refer to as Cayman Law, to have a quorum for our AnnualGeneral Meeting, six or more persons must be present, in person or by proxy, representing more than 50 percent of theOrdinary Shares that were outstanding on May 27, 2008. There is no quorum requirement under Swiss law.

What Vote Is Required to Approve Each Proposal?

Election and Confirmation of Directors (proposal no. 1)

The election of each nominee to serve as a director for a term expiring in 2011 and confirmation of directors whoseterms expire in 2009 and 2010 requires the affirmative vote of a majority of the votes present at the Annual GeneralMeeting.

Approval of the De-Registration Amendment (proposal no. 2)

The De-Registration Amendment requires the affirmative vote of at least two-thirds of the votes cast by the holdersof our Ordinary Shares represented in person or by proxy at the Annual General Meeting.

Approval of the Financial Statement Amendment (proposal no. 3)

The Financial Statement Amendment requires the affirmative vote of at least two-thirds of the votes cast by theholders of our Ordinary Shares represented in person or by proxy at the Annual General Meeting.

Approval of the Par Value Change (proposal no. 4)

The Par Value Change requires the affirmative vote of at least two-thirds of the votes cast by the holders of ourOrdinary Shares represented in person or by proxy at the Annual General Meeting.

Approval of the Continuation (proposal no. 5)

The approval of the Continuation requires the affirmative vote of at least two-thirds of the votes cast by the holdersof our Ordinary Shares represented in person or by proxy at the Annual General Meeting.

Approval of the Swiss Organizational Proposals (proposal nos. 6 through 12)

Under Swiss law, the approval of each of the Swiss Organizational Proposals, other than proposals 7, 8 and 9,requires the affirmative vote of a majority of the votes present at the Annual General Meeting. The approval of proposals

7, 8 and 9, requires the affirmative vote of at least two-thirds of the votes represented and of the majority of the nominalvalue represented at the Annual General Meeting.

Because the Annual General Meeting will be conducted while we are still a Cayman Islands company and becausemost of the Swiss Organizational Proposals would, if required under Cayman Law, require Special Resolutions, we areconditioning approval of the Swiss Organizational Proposals (other than the election of our special and statutory auditors)on the affirmative vote of at least two-thirds of the votes cast by the holders of our Ordinary Shares represented in personor by proxy at the Annual General Meeting.

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Approval of LTIP as amended through the fourth amendment (proposal no. 13)

The approval of the LTIP as amended through the fourth amendment requires the affirmative vote of a majority ofthe votes cast on such proposal at the Annual General Meeting.

Ratification of Appointment of Independent Registered Public Accounting Firm (proposal no. 14)

The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accountingfirm for 2008, and if the Continuation is approved, the election of PricewaterhouseCoopers AG as our statutory auditorfor 2008 require the affirmative vote of a majority of the votes present at the Annual General Meeting.

Approval of the Dividend (proposal no. 15)

Under Swiss law, the approval of a par value reduction to effectuate the Dividend requires the affirmative vote of atleast a majority of the votes present at the Annual General Meeting.

Because the Annual General Meeting will be conducted while we are still a Cayman Islands company and becausethe repayment of capital in the form of a par value reduction would, if required under Cayman Law, require a Special

Resolution, we are conditioning approval of the Dividend on the affirmative vote of at least two-thirds of the votes cast bythe holders of our Ordinary Shares represented in person or by proxy at the Annual General Meeting.

How Are Votes Counted?

In the election of our directors, your vote may be cast separately FOR or AGAINST each nominee or you mayABSTAIN from voting with respect to any nominee. For each of the Continuation Proposals, the approval of the LTIPas amended through the fourth amendment and the ratification of the appointment of our independent registered publicaccounting firm, your vote may be cast FOR or AGAINST or you may ABSTAIN. If you sign your proxy card orbroker voting instruction card with no further instructions, your shares will be voted in accordance with therecommendations of the Board. We will appoint one or more inspectors of election to count votes cast in person or byproxy.

How Will the Directors and Executive Officers of the Company Vote?

At the close of business on the record date, our directors and executive officers owned and were entitled to vote anaggregate of 1,022,870 Ordinary Shares, which represented approximately 0.31 percent of our outstanding OrdinaryShares. Each of our directors and executive officers have indicated their present intention to vote, or cause to be voted,their shares in favor of all of the proposals at the Annual General Meeting.

What Is the Effect of Broker Non-Votes and Abstentions?

A broker non-vote occurs when a broker holding shares for a beneficial owner does not vote on a particular proposalbecause the broker does not have discretionary voting power for that particular item and has not received instructionsfrom the beneficial owner.

Ordinary Shares owned by shareholders electing to abstain from voting with respect to any proposal and brokernon-votes will be counted towards the determination of a quorum but will not be considered present and voting withrespect to elections of directors or, except as provided in the next paragraph, other matters to be voted upon at the AnnualGeneral Meeting. Therefore, abstentions and broker non-votes will have no effect on the outcome of such proposals.

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However, because the approval of the Swiss Organizational Proposals and the Dividend requires, in addition to theaffirmative vote of at least a specified percentage of the votes present, the affirmative vote of the majority of the nominalvalue represented, any shares not voted (whether by abstention, broker non-vote or otherwise) will have the same effect asvotes against such proposals.

What Are the Costs of Soliciting These Proxies and Who Will Pay Them?

The Company will pay all the costs of soliciting these proxies. Although we are mailing these proxy materials, ourdirectors and employees may also solicit proxies by telephone, by fax or other electronic means of communication, or inperson. We will reimburse brokers, banks and nominees and other fiduciaries for the expenses they incur in forwardingthe proxy materials to you. MacKenzie Partners, Inc. is assisting us with the solicitation of proxies for a fee of $20,000plus out-of-pocket expenses.

Where Can I Find the Voting Results?

We intend to publicly disclose the voting results on our website within 14 days following the completion of ourAnnual General Meeting. We will publish the voting results in our Form 10-Q for the second quarter of 2008, which we

will file with the Securities and Exchange Commission, which we refer to as the SEC, in August 2008. You can find thevoting results and the Form 10-Q on our website at www.acelimited.com.

Do Directors Attend the Annual General Meeting?

While we do not have a formal policy regarding Board member attendance at Annual General Meetings ofshareholders, we encourage each member of the Board of Directors to attend each Annual General Meeting ofshareholders. All directors then in office attended the Annual General Meeting of shareholders held on May 17, 2007.

Can a Shareholder Communicate Directly with Our Board? If so, how?

Our Board provides a process for shareholders, employees and other interested parties to send communications to theBoard. Shareholders, employees and other interested parties wanting to contact the Board concerning accounting or

auditing matters may send an e-mail to the Chairman of the Audit Committee at [email protected]. Shareholders,employees and other interested parties wanting to contact:

the Board,

the non-management directors,

the independent directors,

the Chairman of the Board,

the Lead Director,

the chairman of any Board committee, or

any other director,

as to other matters, may send an e-mail to [email protected]. The Corporate Secretary also has access to these e-mailaddresses. Alternatively, shareholders, employees and other interested parties may send written communications to theBoard c/o Corporate Secretary, ACE Global Headquarters, 17 Woodbourne Avenue, Hamilton HM 08, Bermuda, althoughmail to Bermuda is not as prompt as e-mail. Communication with the Board may be anonymous. The Corporate Secretarywill forward to the Lead Director all communications to the Board so received.

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Information About the Continuation

What is the Continuation?

Our Board of Directors is proposing to change our jurisdiction of incorporation from the Cayman Islands to

Switzerland through a transaction called a continuation under Section 226 of Cayman Law and Article 161 of the SwissFederal Code on Private International Law. The continued company will become subject to Swiss law upon theregistration of the Continuation Proposals with the Commercial Register of the Canton of Zurich, Switzerland Thereafter,ACE will be subject to the Proposed Swiss Articles and the organizational regulations (analogous to by-laws underDelaware law). We will be deregistered in the Cayman Islands as of the date shown on the certificate of de-registrationissued by the Cayman Islands Registrar of Companies. Our board of directors has unanimously approved ourContinuation, believes it to be in the best interests of our shareholders and unanimously recommends approval of ourContinuation to our shareholders. In this proxy statement/prospectus we sometimes refer to the Company as ACE(Cayman) prior to the Continuation and as ACE (Switzerland) after the Continuation.

The Continuation will change the governing law that applies to our shareholders from Cayman Law to Swiss law.There are material differences between the Cayman Law and Swiss law. Our shareholders may have more or less rights

under Swiss law depending on the specific set of circumstances. See Approval of the ContinuationComparison ofShareholder Rights for a summary of the significant differences between Cayman Law, Swiss law, and, for comparativepurposes, Delaware law.

The Continuation will be effective upon the registration with the commercial register of the Canton of Zurich,Switzerland. Thereafter, ACE will be subject to the Proposed Swiss Articles and the organizational regulations (analogousto by-laws under Delaware law). We will be deregistered in the Cayman Islands as of the date shown on the certificate ofde-registration issued by the Cayman Islands Registrar of Companies. The de-registration in the Cayman Islands and thecontinuation under Swiss law will occur on the same date.

The Continuation will not interrupt the corporate existence or operations of ACE or the listing of our OrdinaryShares, which are referred to as Registered Shares under Swiss law, on the New York Stock Exchange. Each outstandingOrdinary Share at the time of the Continuation will remain issued and outstanding as a Registered Share of ACE

(Switzerland). Following the completion of our Continuation, our Registered Shares will continue to be listed on the NewYork Stock Exchange under the trading symbol ACE.

We have given notice of our intent to redeem on June 13, 2008 all of our outstanding 7.80 percent CumulativeRedeemable Preferred Shares, Series C, which we refer to as the Preferred Shares, at a redemption price equal to$250.00 per share plus accrued and unpaid dividends, if any, to the redemption date. The Preferred Shares currently tradeon the New York Stock Exchange in the form of depositary shares, with each depositary share representing 1/10 of apreferred share, under the symbol ACE PrC.

Regulatory and Other Approvals

The Continuation is subject to the approval of the Cayman Islands Registrar of Companies, which must approve ourde-registration in the Cayman Islands and satisfaction of the conditions set forth in Section 226 of Cayman Law. The

Continuation is also subject to the registration in the Commercial Register of the Canton of Zurich, Switzerland. We donot believe the Continuation will require approval of any insurance regulatory authorities.

Material Tax Considerations

FOR MORE INFORMATION ABOUT THE MATERIAL TAX CONSIDERATIONS OF THE PAR VALUECHANGE AND THE CONTINUATION, PLEASE READ PROPOSAL NO. 5 APPROVAL OF THECONTINUATION MATERIAL TAX CONSIDERATIONS.

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Swiss Taxation

No material Swiss taxes will be imposed on ACE (Cayman) or its shareholders as a result of the Continuation.However, on a prospective basis ACE (Switzerland) will be subject to Swiss tax laws. In addition, shareholders of ACE

(Switzerland) who are not generally subject to Swiss tax may be subject to Swiss withholding taxes by virtue of theirownership of stock of a Swiss incorporated entity. There are material differences between the tax law of the CaymanIslands and Switzerland.

In connection with and subject to the Continuation, ACE (Cayman) will increase the par value of its Ordinary Sharesby way of a conversion of all of its issued Ordinary Shares into stock and re-conversion of the stock into OrdinaryShares with a par value equal to the New Par Value followed by a stock dividend. Certain Swiss resident individuals maybe subject to Swiss tax as a result of the increase in nominal capital.

United States Taxation

In connection with and subject to the Continuation, ACE (Cayman) will increase the par value of its Ordinary Sharesby way of a conversion of all of its issued Ordinary Shares into stock and re-conversion of the stock into Ordinary

Shares with a par value equal to the New Par Value followed by a stock dividend. For U.S. tax purposes, these three stepsshould be combined such that U.S. Holders will be treated as exchanging old shares of ACE (Cayman) for new shares ofACE (Cayman) in an exchange that will qualify as a tax-free exchange under section 1036 of the U.S Internal RevenueCode of 1986, as amended, which we refer to as the Code, or as a tax-free recapitalization under section 368(a)(1)(E) ofthe Code.

Under United States tax law, the Continuation of ACE (Cayman) will result in a deemed exchange of ACE (Cayman)shares for shares of ACE (Switzerland). Such exchange will constitute a reorganization under section 368(a)(1)(F) ofthe Code. U.S. Holders of ACE (Switzerland) generally will not recognize gain or loss as a result of the deemedexchange.

Cayman Islands Taxation

There are no Cayman Islands tax consequences of the Continuation.

Pro Forma Capitalization

In connection with the Continuation, we are proposing to change the currency in which the par value of our shares isstated from U.S. dollars to Swiss Francs and to increase the par value of our Ordinary Shares from $0.041666667 to theNew Par Value through a conversion of all of our issued Ordinary Shares into stock and re-conversion of the stock intoOrdinary Shares with a par value equal to the New Par Value, which we refer to as the Par Value Conversion, followedimmediately by a stock dividend, which we refer to as the Stock Dividend, to effectively return holders to the numberof Ordinary Shares held before the Par Value Conversion. Notwithstanding the change of the currency in which the parvalue of our Ordinary Shares is stated, we will continue to use USD as our reporting and functional currency forpreparing consolidated financial statements and preparing periodic reports under the U.S. Securities Exchange Act of1934, as amended, which we refer to as the Exchange Act, and shareholders will continue to receive dividends in USD.

For purposes of our consolidated financial statements prepared in accordance with generally accepted accountingprinciples in the United States, which we refer to as US GAAP, the increase in par value will be accomplished by acorresponding reduction of retained earnings and, to the extent necessary, additional paid-in capital. Set forth underProposal No. 4: Amendment of Memorandum of Association to Change Par Value is a statement of stockholdersequity as of March 31, 2008 and as adjusted to give effect to the redemption of our Preferred Shares of $575,000,000 andthe increase in par value and corresponding decrease in additional paid-in capital and retained earnings.

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Accounting Treatment of the Continuation

Under US GAAP, the Continuation represents a transaction between entities under common control. Assets andliabilities transferred between entities under common control are accounted for at historical cost. Accordingly, the assets

and liabilities of ACE (Switzerland), the continuing entity, will be reflected at their historical cost to ACE (Cayman) inour consolidated financial statements.

No Rights for Dissenting Shareholders

Shareholders will not have the right to dissent under Cayman Law. Accordingly, shareholders abstaining or votingagainst any of the amendments to our Articles or the Continuation will still be subject to the effects of these amendmentsand the Continuation if the requisite votes are obtained.

Effects of the Continuation on Your Share Ownership

Once the Continuation is completed, holders of our Ordinary Shares will continue to own one Registered Share foreach Ordinary Share held before the Continuation. Shortly after the effectiveness of the Continuation, we will provideinformation on how to exchange your existing certificates for new certificates and how to apply for enrollment in ourshare register as shareholders with voting rights. You will continue to be a shareholder of the Company entitled todividends, preemptive rights and liquidation proceeds though until you exchange your certificates and register as ashareholder entitled to voting rights you will not be able to exercise any voting rights, prove your ownership interest inthe Company, transfer your shares or exercise other shareholder rights. Beneficial holders of shares held in street namewill not be required to take any action. Holders of options to purchase ACE (Cayman)s Ordinary Shares on the effectivedate of the Continuation will continue to hold options to purchase the same number of Registered Shares of ACE(Switzerland) at the same exercise price.

Effects of the Continuation on Dividends

Under Swiss law all dividends, including distributions through a reduction in par value, must be approved in advanceby our shareholders, though the determination of the record and payment dates may be delegated to our Board ofDirectors. In addition, we are required to declare and pay dividends, including distributions through a reduction in parvalue, in Swiss francs. However, we have arranged for our transfer agent to convert dividend payments so they will bedistributed by our transfer agent in USD converted at the USD/CHF exchange rate shortly before the payment date.

We currently intend, subject to the discretion of our Board of Directors and the needs of our business, to propose ateach annual general meeting, beginning with our annual general meeting in 2009, a reduction in par value that will beeffected in four quarterly installments. The amount of a proposed par value reduction will be based on the Board ofDirectors determination of an appropriate USD dividend for the succeeding year and will be converted into CHF forpurposes of obtaining shareholder approval based on the USD/CHF exchange rate shortly before the annual generalmeeting. As a result, shareholders will be exposed to fluctuations in the USD/CHF exchange rate between such date andthe dividend payment dates. Our Board of Directors may, but is not required to, take into account in determining aproposed par value reduction the amount of USD actually received by shareholders in the prior year versus the USDamount on which the prior years par value reduction was based.

Comparison of Shareholder Rights

Upon completion of the Continuation, our shareholders will be holders of Registered Shares of a Swiss company.After that time, their rights will be governed by Swiss law as well as our Proposed Swiss Articles and organizationalregulations (analogous to by-laws under Delaware law). You should be aware that the

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Continuation will change your rights depending upon the circumstances. The section entitled The ContinuationComparison of Shareholder Rights describes material differences between the rights of shareholders under CaymanLaw, Swiss law and, for comparative purposes, Delaware law. Copies of our Proposed Swiss Articles and organizationalregulations are attached as Exhibits A and B.

We plan to complete the proposed Continuation as soon as possible following approval by our shareholders. OurBoard of Directors may, however, decide to delay the Continuation or not proceed with the Continuation if it determinesthat the transaction is no longer in the best interests of our shareholders. The Board of Directors has not considered anyalternative action if the Continuation is not approved or if it decides to abandon the transaction.

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RISK FACTORS

You should carefully consider the following risk factors, the risk factors described in Item 1A to our Annual Report on

Form 10-K for the year ended December 31, 2007 and subsequent reports on Form 10-Q as well as the other information

included or incorporated by reference into this proxy statement/prospectus, before voting. Additional risks not presently

known to us or that we currently deem insignificant may also impair our business or results of operations as they become

known facts or as facts and circumstances change. Any of the risks described below or in the documents incorporated by

reference could result in a significant or material adverse effect on our results of operations or financial condition.

Your rights as a shareholder will change as a result of the Continuation.

Because of differences in Swiss law and Cayman Law and certain changes that will be made to our governingdocuments in connection with the Continuation, your rights as a shareholder will change if the Continuation is completed. Fora description of these differences, see Proposal No. 5: Approval of the ContinuationComparison of Shareholder Rights.

Following the effectiveness of the Continuation, registered holders must exchange their certificates in order to

exercise certain rights.

Once the Continuation is completed, holders of our Ordinary Shares will continue to own one Registered Share of ACE(Switzerland) for each Ordinary Share of ACE (Cayman) held before the Continuation. However, until they exchange theircertificates for new certificates, registered holder will not be able to exercise any voting rights, prove their ownership interestin the Company, transfer their shares or exercise certain other shareholder rights, though they will be entitled to dividends,preemptive rights and liquidation proceeds. In addition, registered holders must apply to us for enrollment in our shareregister (Aktienregister) as shareholders with voting rights. Our Board of Directors may refuse to register holders of shares asshareholders with voting rights based on certain grounds, including if the holder would, directly or indirectly, formally,constructively or beneficially own (as defined in Article 15 of the Proposed Swiss Articles) or otherwise control voting rightswith respect to 10 percent or more of the registered share capital recorded in the commercial register. See Proposal No. 5:Approval of the Continuation Proposed Swiss ArticlesTransfer of Shares, Shareholders Meeting and VotingRights.

Registered holders must apply for enrollment in our share register as shareholders with voting rights in order to havevoting rights; we may deny such registration under certain circumstances.

To be able to exercise voting rights, registered holders of the shares must apply to us for enrollment in our share register(Aktienregister) as shareholders with voting rights. Our Board of Directors may refuse to register holders of shares asshareholder with voting rights based on certain grounds, including if the holder would, directly or indirectly, formally,constructively or beneficially own (as defined in Article 15 of the Proposed Swiss Articles) or otherwise control voting rightswith respect to 10 percent or more of the registered share capital recorded in the commercial register. See Proposal No. 5:Approval of the Continuation Proposed Swiss ArticlesTransfer of Shares, Shareholders Meeting and VotingRights.

Our stock may be removed as a component of the Standard & Poors 500 Index and/or other indices or from certain

funds.

Our Ordinary Shares are currently a component of the Standard & Poors 500 Index, which we refer to as the S&P500, and other indices. We understand that Standard & Poors does not usually include companies headquartered outside ofthe United States, subject to two exceptions. Foreign stocks included prior to Standard & Poors decision in the early 1990s toexclude foreign stocks have not been removed. In addition, companies that Standard & Poors considers offshore registeredcompanies are sometimes considered U.S. companies where the companys financial statements are prepared in accordancewith US GAAP and are reported in U.S. dollars, the majority of its trading volume is in the United States, the majority of itsoperations are in the United States, and it is registered offshore for tax purposes. While we believe that following the

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Continuation we should qualify for continued inclusion in the S&P 500 under either of these exceptions, Standard & Poorshas indicated that it will not make a decision until after the Continuation and we cannot assure you that Standard & Poorswill not remove our shares as a component of the S&P 500. Similar issues may arise with regard to inclusion of our shares asa component in other indices or inclusion in funds that may impose a variety of qualifications that could be affected by the

Continuation. If our shares are removed as a component of the S&P 500 or other indices, institutional investors attempting totrack the performance of the S&P 500 or such other indices would likely sell our shares, which would likely cause our shareprice to decline.

We are required to declare and pay dividends in Swiss francs and any currency fluctuations between the U.S. dollar

and Swiss francs will affect the dollar value of the dividends we pay.

Under Swiss corporate law, we are required to declare and pay dividends, including distributions through a reduction inpar value, in Swiss francs. Dividend payments will be made by our transfer agent in USD converted at the USD/CHFexchange rate shortly before the payment date. As a result, shareholders will be exposed to fluctuations in the USD/CHFexchange rate between the date used for purposes of calculating the CHF amount of any proposed dividend or par valuereduction and the relevant payment date, which will not be shorter than two months and could be as long as a year.

As a result of increased shareholder voting requirements, we will have less flexibility with respect to certain aspects ofcapital management than previously.

Under Cayman Law, our directors may issue, without shareholder approval, any Ordinary Shares authorized in ourMemorandum of Association that are not issued or reserved. Cayman Law also provides substantial flexibility in establishingthe terms of preferred shares. In addition, our Board of Directors has the right, subject to statutory limitations, to declare andpay dividends on our Ordinary Shares without a shareholder vote. Swiss law allows our shareholders to authorize sharecapital which can be issued by our Board of Directors without shareholder approval but this authorization must be renewedby the shareholder every two years. Swiss law also does not provide as much flexibility in the various terms that can attach todifferent classes of stock. Swiss law also reserves for approval by shareholders many corporate actions over which our Boardof Directors currently has authority. For example, dividends must be approved by shareholders. While we do not believe thatthe differences between Cayman Law and Swiss law relating to our capital management will have an adverse effect on ourCompany, we cannot assure you that situations will not arise where such flexibility would have provided substantial benefits

to our shareholders.

As a result of the increase in par value of our shares, we will have less flexibility with respect to certain aspects of

capital management than previously.

In connection with the Continuation, we will increase the par value of our shares to the New Par Value. Currently the parvalue of our Ordinary Shares is $0.041666667. Based on the USD/CHF exchange rate and the number of issued andoutstanding Ordinary Shares as of May 27, 2008, the New Par Value would have been CHF 34.29. Under Swiss law, we maynot generally issue Registered Shares below their par value. As of May 28, 2008, the closing price of our Ordinary Shares onthe NYSE was $58.89. In the event there is a need to raise common equity capital at a time when the trading price of ourRegistered Shares is below our par value, we will need to obtain approval of our shareholders to decrease the par value of ourRegistered Shares. We cannot assure you that we would be able to obtain such shareholder approval. Furthermore, obtainingshareholder approval would require filing a preliminary proxy statement with the SEC and convening a meeting of

shareholders which would delay any capital raising plans. Furthermore, any reduction in par value would decrease our abilityto pay dividends as a repayment of share capital and thus not subject to Swiss withholding tax. See You may be subject toSwiss withholding taxes on the payment of dividends.

The Continuation will result in additional direct and indirect costs whether or not completed.

The Continuation will result in additional direct costs. Following the Continuation, we will hold Board meetings andmanagement strategy meetings in Zurich as well as our annual general meetings beginning in 2009 and thereafter. We willalso expand our physical presence in Switzerland. We will also incur additional costs and expenses, primarily professionalfees, to comply with Swiss corporate and tax laws. In addition, we will incur attorneys fees, accountants fees, filing fees,mailing expenses and financial printing expenses in


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connection with the Continuation, whether or not it is approved. The Continuation may also result in certain indirect costs bydiverting attention of our management and employees from our business with resulting increased administrative costs andexpenses.

The Continuation could result in adverse tax consequences for you.

Depending on your circumstances, you may be required to make a filing with the U.S. Internal Revenue Service, whichwe refer to as the IRS, as a result of the change of our place of incorporation. Failure to make this filing on a timely basiscould result in your owing taxes because of the change, even though you will not have realized any income or liquidity as aresult of the change. For a more detailed description of the tax consequences associated with this transaction, please readProposal No. 5: Approval of the ContinuationMaterial Tax ConsiderationsUnited States Tax Considerations.

The Par Value Change could result in adverse tax consequences to you.

Depending upon your circumstances, for other than U.S. Shareholders and certain Swiss shareholders, you may be taxedon the Par Value Change. For a more detailed description of the tax consequences associated with the Par Value Change,please read Proposal No. 5: Approval of the ContinuationMaterial Tax Considerations. You should consult your taxadvisor regarding applicable tax consequences.

You may be subject to Swiss withholding taxes on the payment of dividends.

Dividends paid by ACE (Switzerland) will generally be subject to a Swiss federal withholding tax at a rate of 35 percent.The withholding tax must be withheld from the gross distribution, and be paid to the Swiss Federal Tax Administration.Dividends paid on our Ordinary Shares are not currently subject to withholding tax in the Cayman Islands. A U.S. holder thatqualifies for benefits under the Convention between the United States of America and the Swiss Confederation for theAvoidance of Double Taxation with Respect to Taxes on Income, which we refer to as the US-Swiss Treaty, may apply fora refund of the tax withheld in excess of the 15 percent treaty rate (or for a full refund in case of qualifying retirementarrangements). As described below payment of a dividend in the form of a par value reduction or qualifying paid in capitalreduction is not subject to Swiss withholding tax. See Proposal No. 5: Approval of the ContinuationMaterial TaxConsiderationsTaxation of ShareholdersSwiss Taxation. In connection with and prior to the Continuation, we willincrease the par value of our shares to the New Par Value. We currently intend, subject to the requirements of our businessand applicable law, to recommend to shareholders that dividends be paid in the form of a reduction of our par value orqualifying paid in capital. We estimate we would be able to pay dividends in the form of a reduction of par value orqualifying paid in capital, and thus exempt from Swiss withholding tax, for approximately 15-20 years. This range may varydepending upon changes in annual dividends, special dividends, fluctuations in USD/CHF exchange rates, increases/decreases in par value or qualifying paid in capital or changes or new interpretations to Swiss tax law or regulations.However, there can be no assurance that our shareholders will approve a reduction in par value or qualifying paid in capitaleach year, that we will be able to meet the other legal requirements for a reduction in par value, or that Swiss withholdingrules will not be changed in the future.

We will be subject to various Swiss taxation as a result of the Continuation.

Switzerland imposes for holding companies a corporate Federal income tax at an effective tax rate of 7.83 percent,

although, as a holding company, we will be en

Final Prospectus:Form 424B3

Documents

Transcript of Final Prospectus:Form 424B3